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Does your financed car have a kill switch?

Like many other Marylanders, you have no choice but to drive to and from work. If you cannot afford to buy a car outright, you also might have no choice but to finance one. While it is advisable to purchase your vehicle from a highly-rated dealer, there are plenty of other dealerships from which to choose.

Dealerships that have buy-here-pay-here programs often offer subprime loans to cash-strapped buyers. According to Pew Trusts, many of these dealers install kill switches on the vehicles they sell. Unfortunately, unless you read your contract carefully or ask the dealer, you might not know whether your car has one.

What does a kill switch do?

A kill switch is a simple mechanical component that installs on a vehicle’s ignition system. This switch allows the dealer to remotely prevent you from starting or driving your car. Indeed, if the dealer activates the kill switch, your vehicle is likely to stay wherever you last parked it.

Why do some dealers use kill switches?

Like other lenders, dealers use your vehicle as collateral to secure your loan. In exchange for having the car, you agree to make regular payments on time. If you miss a payment, your lender might have the legal authority to repossess your car. The kill switch makes repossession easier, as it prevents you or anyone else from moving the vehicle to a place where the repossessor cannot find it.

How can you protect yourself?

If your vehicle has a kill switch, the most effective way to keep the lender from activating it is to stay current with your payments. Indeed, depending on the terms of your agreement, the lender might be able to repossess the vehicle shortly after your first missed payment.

Ultimately, if you are on the verge of missing a payment, it might be time to explore your legal and financial options.